Western Digital: Floods to Hurt Disk Drive Production Until Q3

Western Digital said that flooding in Thailand, which affected its ability to manufacture hard disk drives, cost the company $199 million. WD also said that it won't be back to pre-flood production levels until the third calendar quarter.

Western Digital said that flooding in Thailand, which affected its ability to manufacture hard disk drives, cost the company $199 million. WD also said that it won't be back to pre-flood production levels until the third calendar quarter.

WD, the largest disk-drive maker, nevertheless reported a profit of $145 million on revenue of $2 billion for its second fiscal quarter. Profits fell from $225 million for the same period a year ago, when WD reported revenue of $2.5 billion.

WD shipped just 28.5 million hard drives, just over half of what it shipped a year ago, or 52.2 million.

A wave of catastrophic floodwaters swept over much of Thailand< in the fall of 2011, killing hundreds and flooding key industrial parks where component makers used by both rival Seagate and Western Digital manufactured their products. The strain on the disk-drive assembly design chain has affected others in the PC market, such as Intel, while causing disk-drive prices to rise in the short term.

Although WD didn't provide the average selling price of its drives, the fact that it could sell a dramatically lower number of drives and maintain comparable revenue numbers and profits probably indicates that prices will remain high.

Still, WD said that it has made some small short-term progress. On Sunday, the company resumed slider production, one of the key disk-drive components, which had been suspended since Oct. 10. Hard-disk manufacturing also is slowly ramping up, WD said.

"We have made substantial progress in restoring WD's manufacturing capabilities in the aftermath of the historic flooding in Thailand, and this is reflected in our second quarter financial results and in the resumption of our operations there," said John Coyne, president and chief executive officer of WD, in a statement. "While much work remains to be done over the next several quarters to reach our pre-flood manufacturing capabilities, the progress thus far is significantly ahead of our original expectations and is a tribute to the dedicated and effective actions of our employees, contractors and Thai government agencies, the efforts of our supply partners and the support of our customers. We are grateful to all involved in this extraordinary effort."

About the Author

Mark Hachman Mark joined ExtremeTech in 2001 as the news editor, after rival CMP/United Media decided at the time that online news did not make sense in the new millennium.
Mark stumbled into his career after discovering that writing the great American novel did not pay a monthly salary, and that his other possible career choice, physics, require... See Full Bio

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